BRUSSELS (Reuters) - European Union regulators on Wednesday approved a German scheme to compensate heavy industries for higher electricity costs resulting from the bloc’s emissions trading scheme (ETS).
The scheme introduced earlier this year is meant to prevent energy-intensive industries such as steel and cement makers from relocating outside Europe to avoid the costs associated with the EU’s carbon trading scheme, known as “carbon leakage.”
“The Commission’s investigation found that the scheme... would effectively prevent carbon leakage while keeping competition distortions to a minimum,” the European Commission said in a statement.
But the EU executive rejected a separate 40 million euro ($53 million) compensation scheme for non-ferrous metal producers in Germany introduced in 2009, saying Berlin had failed to prove a risk of carbon leakage at that time.
On Monday, the Commission said it was looking into a complaint about Germany’s renewable energy law, which exempts some firms from paying charges, but will only decide after August whether to open a formal investigation.
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Reporting by Charlie Dunmore; editing by Ethan Bilby and James Jukwey